Domain specification, or pattern formation, is an essential step in forming a complex organism from a single cell. Cells within an individual domain take up positional cues regarding to its relative position in the body and this information is passed down to its daughter cells. In addition, the inherited positional identities that based on cell lineage can be continuously modified and specified through cell-cell interactions until cell fate commitment. This process involves cellular signaling pathways and mis-regulations cause aberrant cellular growth. Well-studied pathways such as Sonic Hedgehog/Patched and Wnt signaling have been associated with various human disorders in tumorgenesis and development. Drosophila eye has proven to be a good system in studying domain specification and deciphering components of signaling pathways. Mutants that have specific dorsal or ventral eye reduction are especially suited for such a study. A ventral-eye reduced mutant, Lobe, was isolated in 1925 by Morgan et al. To study the Lobe gene, I propose four specific aims: (1) Molecular analysis of Lobe. (2) Function of Lobe in the Drosophila eye development. (3) Lobe and hh/dpp/wg signaling pathways. (4) Identifying genes interacting with Lobe. The study proposed is significant in two ways: it may identify a new component of the Hh/Dpp/Wg pathways which are conserved and implicated in various human diseases and it will further our understandings of the pattern formation process in animal development.